Sellers on Amazon FBA are frequently concerned about their revenue share after deducting all fees and other expenses. They are concerned that it will add up and eat into their profit margins.
It is most practical to use an Amazon FBA calculator for this purpose. It is useful in determining how profitable a product is as well as selecting the best fulfilment method for your items that will provide you with good returns.
How to Check Amazon Profit and Revenue?
To determine your profitability and revenue, you must know how much you will spend on various fees such as registration, referral fees, FBA/FBM fees, advertising costs, and so on.
Only after you have a thorough understanding of these charges will you be able to calculate your profits.
Amazon Fees of Various Types
- To begin, you will be charged based on the type of seller account you have. Individual sellers pay $0.99 per item sold, while professional sellers must pay $39.99 per month.
- Sellers must pay a referral fee to Amazon, which typically ranges from 8% to 15% and can reach up to 45 percent depending on the category in which they are selling.
- FBA and FBM fees must also be considered. FBA storage and shipping fees are determined by the size and weight of your products. Other fees are levied for refund administration and inventory that is stranded in FBA warehouses. The FBA fees are deducted from your sales, and your profits are credited to your account every two weeks.
- Advertising is critical to making money on Amazon. Amazon ads use a PPC (pay per click) model, with the average cost per click being $0.81.
- Consider all of the expenses associated with selling on Amazon.
Steps to Determine Amazon Profit and Revenue
First, check your Amazon seller dashboard for your sales figures.
Once you’ve got a general idea, look at the payments report on the Payments page to see how much of your Amazon expenses are eating into your revenue.
You’ll then have a good idea of how much you’ve spent on various Amazon fees.
Choosing a fee percentage that you’re willing to pay can help you stay profitable. This fee percentage should be one with which you are comfortable, and you should strive not to spend more than that amount.
This is done so that when you do your calculations, you will immediately realize that you will not be earning as many profits as you anticipated when the fee percentage turns out to be much higher than what you had originally decided on.
You can then begin to reduce functions such as advertising. which may reduce your revenue and, as a result, your profits
Profitability Calculation
Most Amazon sellers begin to see profits after the first 12 months of running their Amazon business. To determine your profitability over a given period, you must consider the revenue you generated, the cost of all the goods you sold, and all other charges you incurred while using the Amazon platform.
Because different sellers may spend more on different aspects of selling, this isn’t a universal method that all sellers can use to calculate their profits. However, you can use this as a starting point for your calculations.
Revenue Calculation
When it comes to calculating revenue, you must consider your sales figures. SellerApp’s Amazon Profit Dashboard is specifically designed for this purpose, providing you with accurate insights into your profits and sales.
Aside from sales figures, you must deduct refunds issued to customers as well as Amazon reimbursements for errors made during order fulfilment. This will provide you with the revenue you generated.
FBA Calculator for Amazon Seller Central
When you log in to Amazon Seller Central, you will see an FBA revenue calculator on your dashboard, which Amazon provides to its sellers for free, and you can also try other popular Amazon FBA calculators available online.
Simply enter your ASIN and you will be shown all of the fees that will apply to your products as well as the profits that you can earn. This calculator can also be used every time you reprice so you know where you stand financially.
Conclusion:
While product research can tell you how viable a product is to sell on Amazon, profit margins are important if you want to stay in business. The most straightforward method is to deduct all of your additional or overhead costs, as well as the amount spent on purchasing the goods, from the final sale price.
Make sure to carefully review all of Amazon’s fees, especially if you’re a new seller, so you know exactly what to expect and can calculate your expected profits accordingly.
Author’s Bio:
Arishekar N is the Senior Director of Marketing and Growth at SellerApp, an e-commerce data analytics solution. He is responsible for overseeing the development and implementation of marketing strategies, as well as increasing process efficiency by executing cutting-edge Search Engine Optimization strategies at SellerApp.
Arishekar has over 10 years of experience in marketing analytics and SEO. He has worked as a Digital Specialist for the tech giant IBM and most recently as the Senior Marketing Specialist for ZioTive Technologies where he enhanced their site structure by increasing website and mobile usability. Previously, he worked as a Senior SEO Analyst for Star Group where he was responsible for managing SEO Audits and analytics.
